This article looks at the different duration orders you can use with foreign exchange trading.
There are many types of orders that you are able to use when you complete foreign exchange trading. These orders will include the use of market orders, limit orders, stop orders and conditional orders. What many traders do not realise is that they can also set orders that work for a set duration. This means that the order will last for a set amount of time. It is important that you understand the duration orders and how they can affect the trading that you complete. There are certain foreign exchange trading strategies that benefit from the use of these orders and you need to consider this.
The Day Foreign Exchange Trading Order
The one duration order that you can use is the day order. This order will automatically expire at the end of the trading day if it has not been triggered. The end of the trading day may vary depending on the forex broker that you are using. As the forex market offers 24 hour foreign exchange trading during the week there is no set cut off for the day. This means that the broker will determine when the cut off for the day is. This will generally be linked to the end of the business day where the broker is located.
The Good-Till-Cancelled Order
This duration order type will remain active on the market until it is triggered or until you cancel it. You have to be careful when you use this order type because you do not want to forget about it. If you have forgotten about the order then it could be triggered at the wrong time. If you have the order open for 30 to 90 days then your broker will generally cancel it assuming that you are no longer going to need this.
The GTD order will remain active until a set date. The date will be set up on when you open the order. The order will remain active until it has been filled or you cancel the order. As there is a set cancellation date there will be no timeframe used by the broker for automatic cancellation of the order.
Another duration order that you can use is the immediate-or-cancel order which is also known as the IOC order. This order will need to have part or all of the order filled immediately or the order will be cancelled. This order is not that common on the forex market as there are few occasions where only part of an order will be filled. Most traders will use a market order in place of the IOC.
The fill-or-kill order is another order that you do not often see on the forex market. This order will be cancelled if it is only partially filled. As this is not something you often find on the forex market because of the liquidity of the market you will not have to use this order very often. As with the IOC order the market order is often used instead of this.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS